Strategic Planning: How one manufacturer found new revenue and profit hiding in plain sight.

The general manager of a small US division of a multibillion dollar European manufacturing company came up to me one day after a strategy program. He was trying to figure out how to increase their division sales and expand their market reach. Their product was a special vacuum pump that was installed as part of an assembly line operation in their customer’s facilities. Since the client often installed the pump in their own assembly line, the reps were not always aware how the pump was used. Even when the reps knew the application, they typically did not think to share that new application nor did they realize that it presented an opportunity for the company to target a new market.

Managers knew that one use of the pump was to extract water from pulp to make press felts. They also knew that there was an application that included the vacuum molding of paper products such as egg cartons. Could there be other uses as well in other industries that had not been targeted? Without knowing how the customers were using these pumps, they could not target their marketing and benefit their clients with new uses.

With our guidance, a carefully designed study of their customers both in Europe and in the US was conducted to identify the different uses for the pump. In a guided workshop here in the US, about 30 people from Europe and 25 from the USA came together to participate in creative thinking processes and the results excited everyone.

Everyone had real eye openers in how creative customers were being in the use of their pumps. We analyzed the information to determine if any of the new uses held financially viable potential for new major markets. The new markets we discovered resulted in several million new dollars of revenue and profit for this company.

When a customer has a problem, can you find innovative ways to solve it? Are your products and services part of the problem or part of the solution? Are you aware of which they are? Don’t assume you know. Having intimate accurate knowledge of how your products are being used and what the result is for the client can open new doors of revenue and profit to your business. It can also open your eyes to potential problems and solutions that may surprise you. Make sure you know what your customers are doing and needing before, during and after they use your products and services. It will be an eye opener and possibly a revenue and profit builder for you.

Verney, Thank you for your comment. Having worked for a multibillion dollar company myself, it is easy to see how communication breaks down. Everyone is busy scrambling and the reps are trying to get to the next sale. Often once the sale is made, the rep may ask if the client is happy, but don’t think to ask the use. Those are very different questions. Management is busy making their numbers as well and they don’t think to prod the reps to ask questions out of the norm. There has to be a deliberate process in place that ensures certain questions are automatic. There also has to be accountability. Everyone wins when there is.